Brenda Hetrick, Mobile Alabama Bankruptcy attorney, explains that Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court.

Bankruptcies can generally be described as liquidation or reorganization:

Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court.

Under a reorganization bankruptcy (Chapters 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

As of October 17, 2005, the requirements in which a debtor may file Chapter 7 bankruptcy changed under the Bankruptcy Abuse Prevention and Consumer Protection Act. Debtors are now required to seek budget and credit counseling six months prior to filing and financial "testing" is required to determine the debtor's capacity for debt repayment. Chapter 7 cannot be filed if the household income is greater than the median household income as deemed by the state and state exemptions cannot be applied unless the debtor has resided at his/her current residence for over two years.

Due to the imposed requirements for Chapter 7 bankruptcy as set forth by the new laws, debtors who were eligible to file under Chapter 7 will now have to file under Chapter 13 bankruptcy instead, in which individuals and creditors agree to a court-imposed plan that requires some or all debts be repaid over five years, with an appointed trustee assigned to monitor the repayment process. Bankruptcy filings will continue to be recorded on an individual's credit report for seven years in the case of Chapter 13, and up to ten years for Chapter 7. For additional information related to new bankruptcy laws, contact the Mobile, Alabama bankruptcy Attorneys of Brenda Drendel Hetrick, PC.

Chapter 13:

Bankruptcy lawyer Brenda Hetrick represents clients with Chapter 13 bankruptcy issues. Chapter 13 permits individuals to keep their property by repaying creditors all or a portion of their debt out of their future income over a 3 to 5 year period.

It is not available to corporations or partnerships. Each chapter 13 debtor proposes a repayment plan that must be approved by the court. After completion of payments under the plan, chapter 13 debtors receive a discharge of most debts.

Chapter 13 Benefits:

Will stop foreclosure and repossession

Will allow you to catch up your missed payments over time

Allows you to keep your automobile

May be able to lower your monthly payments and interest rate

Stops civil lawsuit and garnishments

Stops all collection activity by creditors

Allows you to repay tax debts through your plan

Allows you to repay alimony or child support arrearage through your plan

A bankruptcy can remain on your credit for up to 10 years.

Chapter 7 (known as a 'fresh start" bankruptcy):

Chapter 7, commonly referred to as straight bankruptcy or liquidation cases, may be filed by an individual, corporation or a partnership. Not everyone, however, qualifies for Chapter 7 and a court appointed Trustee reviews your assets and debts.

It is recommended that you discuss your Chapter 7 option with Alabama Bankruptcy attorney Brenda Hetrick in order to understand what debts you will be left with after your case is completed.

A typical Chapter 7 case may be discharged in three to four months with unsecured debts such as credit cards and medical bills eliminated. Generally, debts with secured creditors on property that you wish to keep such as your home or automobile may be reaffirmed or the property can be surrendered.

What debts are not eliminated under chapter 7 bankruptcy?

Child Support

Alimony

Student Loans

Some taxes or special debts incurred through fraud or related to drugs or alcohol

What are some benefits of chapter 7 bankruptcy?

The case may be discharged in three to four months

Credit card and medical bills may be erased

Home and car may be retained

Civil lawsuits and garnishments are stopped

Collection activity by creditors are stopped

Debt Consolidation:

Are you are overwhelmed with credit card debt, tired of harassing phone calls or just like the convenience of one monthly payment? A credit counseling program may help you.

Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It enables you to further reduce the amount owed and thereby eliminate interest.

Very often you can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, it is best to contact Brenda Drendel Hetrick, PC, to discuss your debt consolidation
options:

You have begun charging to your credit card essential expenses like food and daily expenditures

You are making only the minimum payments on your credit cards each month

You are near the limit of your credit cards

You have too many credit cards

You are unsure how much money you owe creditors

Bankruptcy Attorney Brenda Hetrick will speak to your creditors to:

Stop any harassing phone calls

Reduce your monthly payments

Consolidate all of your unsecured credit card debt into one simple monthly payment

Reduce the number of years to pay off your debt

Bankruptcy Fraud:

Bankruptcy fraud is a bankruptcy filed with criminal intent; i.e., the intention of evading payment for goods or services although the consumer has funds for repayment, or accepting payment for goods or services but not supplying such services. Common types of bankruptcy fraud include petition mills, false oath, concealment of assets and fraudulent conveyance.

As of October 17, 2005, the requirements in which a debtor may file Chapter 7 bankruptcy changed under the Bankruptcy Abuse Prevention and Consumer Protection Act. To avoid unintentional bankruptcy fraud and gain additional information related to how the new bankruptcy laws affect you, contact the Brenda Drendel Hetrick today.

If you or someone you know in Mobile, Prichard, Saraland, Daphne, or throughout the surrounding cities and counties of Southern Alabama needs debt legal consolidation counsel or the assistance of an experienced bankruptcy lawyer, contact Brenda Drendel Hetrick, PC, today at 866-733-6001, or use the
contact form provided on this site to schedule your free initial consultation.

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